3 Important Decisions in the First Owners’ Committee Meeting

For a thriving apartment community, strong coordination between residents/tenants, the real estate management agent, and developers/Building Owner's Committee (BOC) is crucial. This collaboration hinges on a clear division of functions, tasks, and responsibilities outlined in legal provisions and implemented through regulations and agreements.

Therefore, the first Owners' Committee Meeting plays a key role in establishing a stable foundation for your building. Its vital tasks include:

• Electing a Building Owner's Committee: This committee acts as the residents' voice, representing their interests and concerns.
• Receiving the Maintenance Fund: The committee ensures this fund, typically contributed by developers, is used responsibly for upkeep and future repairs.
• Establishing Regulations: Clear rules and guidelines for residents and the management agent are essential for smooth operation.
• Selecting a Management Agent: Choosing a qualified and experienced agent ensures professional handling of daily operations, service fees, maintenance plans, and building upkeep costs.
• Developing Building Regulations: A comprehensive set of rules promotes responsible living, safety, and a comfortable environment for all residents.

These tasks lay the groundwork for operational efficiency and consistent service quality within your apartment building. By fostering close collaboration and ensuring clear understanding of roles and responsibilities, the first Owners' Committee Meeting sets the stage for a harmonious and thriving community.

Remember, Savills Property Management is here to support you every step of the way. From facilitating effective committee meetings to selecting the right management agent, we offer expert guidance and valuable resources. Contact us today and let us help you build a stronger, more vibrant community in your apartment building.

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• What is an Owners’ Committee Meeting?

WHEN DEVELOPERS HAVE TO ORGANISE THE FIRST OWNERS’ COMMITTEE MEETING?

Requirements for organising the first Owners’ Committee Meeting are specified in Clause 1, Article 13 of Integrated Document 05/VBHN-BXD:

Organising the first Owners’ Committee Meeting is mandatory. If the first Owners’ Committee Meeting is not organised after 50% of the apartments are handed over, developers may be subject to administrative sanctions according to the provisions of law. 

However, not all developers understand how to organise the first Owners’ Committee Meeting effectively. Savills Property Management team will provide consultancy that can help developers successfully organise the first Owners’ Committee Meeting to avoid disputes and additional costs and to build a cohesive community.

Find out more about Savills consultancy package on organising the first Owners’ Committee Meeting.

3 IMPORTANT DECISIONS IN THE FIRST OWNERS’ COMMITTEE MEETING

1. Establish building rules

Developers are responsible for establishing the rules of management and use of apartment buildings, attaching purchase or lease contracts, and publicly announcing these rules.

At the first Owners’ Committee Meeting, developers, and residents review, amend and supplement building rules, provided that the amended and supplemented contents do not conflict with regulations. The rules, after being approved, will lay the foundation for all activities, improve operational efficiency and cooperation between relevant parties, as well as build a close-knit community.

Developers and management agents can reference Document No. 05/VBHN-BXD when establishing building rules to suit each building and apartment complex.

After the first Owners’ Committee Meeting, the BOC, or the apartment management representative in cases where the Building Owners’ Committee is not required to be established, will be responsible for publicising these rules in the community room, elevator lobby and reception area. These regulations can continue to be commented on and adjusted by the BOC and residents and approved at the annual Owners’ Committee Meeting.

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2. Establish of Building Owners’ Committee

Building Owners’ Committee is an organisation with full legal status, a seal and shall be organised like the Board of Directors of a joint-stock company or like a Board of Cooperatives. Members of the BOC are elected by residents at the Owners’ Committee Meeting, then exercise certain powers and responsibilities to ensure the stable operations of the apartment building.  

Establishing BOC is one of the most important decisions of the first Owners’ Committee Meeting. Clause 4, Article 13 of the Regulations on management and use of apartment buildings, amended by Clause 3, Article 13, Integrated Document No. 05/VBHN-BXD stipulates content related to the BOC, including the regulations on the election of the BOC, the name of BOC, number and list of members of BOC, head and deputy head of BOC (if the apartment building has established BOC); plans for professional training in apartment building operations and management for the members of the BOC;

According to Article 17 of Integrated Document No. 05/VBHN-BXD on the management and use regulations for apartment buildings:

- For multi-owner apartment buildings requiring the establishment of a management board according to the Law on Housing, the Management Board shall be an organisation having legal capacity, legal stamp and operating according to the model as prescribed in Clause 1, Article 18

- For single-owner apartment buildings or multi-owner apartment buildings having less than 20 apartments, the meeting shall decide whether to establish the Management Board. If the Management Board is established, its operating principles and organisational model are as follows:

• For single-owner apartment buildings, the BOC shall not have the legal capacity and legal stamp; the BOC shall operate according to the model as prescribed and exercise rights and obligations.
• For multi-owner apartment buildings, the model and operating principles of the BOC are implemented according to regulations.

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Members of BOC

The number of members of BOC shall be decided at the Owners’ Committee Meeting but must comply with the provisions in Clause 1, Article 20 of Integrated Document No. 05/VBHN-BXD:

• For an apartment building comprising only one block, the BOC must have at least 03 members. For an apartment building comprising multiple blocks, there must be at least 01 member for each block;
• For an apartment building complex, the BOC must have at least 06 members.

Composition of BOC

According to Article 20 of Integrated Document No. 05/VBHN-BXD, the composition of the BOC is as follows:

- The composition of the BOC of apartment buildings and apartment complexes with many owners is prescribed as follows:

• The BOC of an apartment building block shall include 01 head, 01 or 02 deputy heads and other members decided by the Owners’ Committee Meeting.
• The BOC of an apartment building complex shall include one head; each block in the complex shall hold a meeting to appoint 01 or 02 representatives as deputy heads, and other members shall be decided by the Owners’ Committee Meeting.

- The composition of the BOC of a single-owner apartment building or single-owner apartment building complex shall include 01 head, 01 or 02 deputy heads, and other members decided by the Owners’ Committee Meeting.

3. Handing over the maintenance fund

Before the first Owners’ Committee Meeting, developers are responsible for collecting and managing the maintenance fund. Within 07 days, from the day on which the service fees are collected, developers shall send it to a savings account opened in a credit institution operating in Viet Nam for management and notify the provincial housing authority.

After the first Owners’ Committee Meeting, when BOC is established, the developer must hand over the apartment maintenance fund. Pursuant to Clause 1, Article 109 of the Law on Housing 2014, handover procedures will be carried out according to the following steps:

• Within 07 days, from the day on which the BOC is established, the developer shall transfer the maintenance funding to the BOC, including interests.
• Notify the housing authority of the province.
• If the developer fails to transfer the funds, the BOC is entitled to request the People’s Committee of the province where the apartment building is located to enforce the transfer.

CONCLUSION

Organising the first Owners’ Committee Meeting is an important and complex task with many items that need to comply with the law and be carefully prepared. Therefore, developers should utilise skilled advisors with experience in property management and operations. A successful first Owners’ Committee Meeting will help ensure stable operations, avoid disputes, and create favourable conditions to handle problems that may arise later.

Savills delivers management and consultancy across commercial centres, offices, apartments and urban areas. Savills provides consultancy for the first Owners’ Committee Meetings that includes:

Consulting on organising the first Owners’ Committee Meeting on a legal and statutory basis.

Consulting on establishing the BOC according to current legal regulations.

Please contact Savills Property Management team for more information about management and consultancy services.

Read more:

• How to Organise the First Owners’ Committee Meeting